Fahrul Azmi1206337002

• Ekonomi dan Politik pada awalnya memiliki kesamaan (both mentally and structurally in the academy).

• Muncul gagasan pemisahan ekonomi dan politik.

• Economics came to be about axiomatic models of rational choice, while government and politics remained concerned with interest groups, logrolling, power, and contested visions about the purposes of government and society.

Atomistic choices in the status quo institutional setup (invariably called “the market”) are found to produce outcomes—smoke, toxic fumes, pesticide-laden fruit and groundwater, airport noise, chemical discharges into rivers—that impose unwanted costs on others.

These spillovers (harms) are then said to represent a market failure.

• Externalities are the effect of a decision on a third party that is not taken into account by the decision-maker.

• External Costs/Negative externalities

Decision makers do not take into account the cost imposed on society and others as a result of their decision

e.g. pollution, traffic congestion, environmental degradation, depletion of the ozone layer, misuse of alcohol, tobacco, anti-social behaviour, drug abuse, poor housing

That public clamor for relief from such externalities emerges in the only venue where such concerns can emerge—the realm of politics.

It is only with the aid of benefit-cost analysis that we will be certain of the “rationality” of new environmental policies (Arrow, et al. 1996; Cropper, 2000; Palmer, et al. 1995; Pearce 1997).

Those seeking a cleaner environment will be able to free ride by getting something through the legislature (new institutional arrangements leading to an improved environment) without having to pay for it.

POLICY LOCK-IN•The major problem in environmental policy is policy lock-in .•Policy lock-in (extreme path dependence) deprives environmental policy of the dynamic adjustments necessary for achieving sustainability•Ex: The obvious problem is to determine, exactly, what is and what is not pollution

Sustainability is about the world to be inherited by future persons. Sustainability is not about what would be efficient (or even fair) for the present generation to bequeath to the future.

Unfortunately we cannot know what sort of world future persons will prefer.

In the absence of that, the standard story is to make sure that irreversible options are not undertaken now that will preclude desirable outcomes for future persons.

Create a policy process that avoids policy lock-in.

Two problems defeat the prescriptive certitude sought by standard environmental policy. Complexity and Vagueness.

Complexity•Complexity denies to us the essential tractability and predictability we need in order to advance tendentious Paretian prescriptions about what is optimal to do in the realm of human action.•Models of optimality bring nothing compelling and necessary to the realm of human action.•Policy prescriptions necessarily emerge from explanatory algorithms and those prescriptions seek to ratify particular reasons why certain outcomes are (or are not) observed.

Complexity denies to us the necessary clarity about whether or not the economy, at the moment, is in a Pareto optimal state.

Complexity does not deny us the opportunity to seek ways to improve the future.

Complexity merely forces us toward greater modesty in dispensing prescriptive certitudes that become the basis for policy path dependence.

First, is it true that X is a pollutant? Second, at what level is X a pollutant?

•Policy lock-in concerns precisely this point.•There is a growing literature on the problems of vagueness and what is called the borderline problem.•Philosophers have approached this problem in three different ways.

The epistemic approach suggests that sharp boundaries exist but are obscured by our ignorance.

The second approach concerns degree theories, of which fuzzy sets are an example. These approaches presume that there is some precise truth about the degree to which a vague statement is true.

Finally, there are the supervaluationist accounts. Here, the truth of vague statements or expressions depends on how they are (or can be) made more precise.

A. Escaping Scientism Scientism is the idea that the approaches and attributes of

the natural sciences constitute the proper model for guiding other actions.

Scientism is parasitic on reason. Scientism sequesters and mocks reasoned dialogue and seeks to trump reason giving with reductionist truth claims (Bromley, 2006).

Rescuing environmental policy from scientism requires that prescriptive conceit must now give way to public discourse, debate, and the offering of reasons.

Achieving sustainability in environmental policy reminds us that sustainability—properly conceived of—concerns human processes, not biological or ecological processes.

B. Escaping the Regulatory DomainThere is something separate and sanctified called the economy that must be judiciously protected from something separate and despicable called political interference.The obvious issue here is that many participants in environmental policy simply cannot imagine how one would cope with water and air pollution except in the sort of convoluted regulatory domainTo consider an obvious example, land-use policy in America is shaped under a wide array of democratic processes. Local communities have enormous latitude, as long as Constitutional strictures on due process and equal protection are followed.National environmental policy has been captured by the scientists and the lawyers. It seems like a good time to let the citizens in the room.